Post by unlawflcombatnt on Mar 15, 2011 16:49:45 GMT -6
from Firedoglake:
Brand Name Drug Prices Soar
Mon, Mar 14, 2011
by Jon Walker
"Over the passed few years, the price of common brand name prescription drugs have experienced an incredible level of inflation significantly higher than both regular inflation and even medical inflation, according to the Government Accountability Office. Yet, at the same time, the cost of common generic drugs has fallen. Here we have another great reminder that corporations inherently want monopolies and not free markets. From the GAO report (PDF):
We found that the U&C price index for our first basket of 100 commonly used prescription drugs increased at an average annual rate of 6.6 percent from 2006 through the first quarter of 2010 compared with a 3.8 percent average annual increase in the medical CPI. The increase in the price index from the first quarter of 2009 through the first quarter of 2010—prior to passage of health reform in March 2010—was 5.9 percent, less than the increase for the 2 years prior but higher than in 2006. We also found that the U&C price index for our second basket of 55 brand-name drugs increased at an average annual rate of 8.3 percent during our time period. In contrast, the U&C price index for our third basket of 45 generic drugs decreased at an average annual rate of 2.6 percent. Finally, when shifts in consumer utilization between brand-name and generic versions of the same drug were included in the analysis using our fourth basket of drugs selected by active ingredient, the U&C price index increased about 2.6 percent per year, a much lower rate than the 6.6 percent annual increase observed when shifts in utilization were not included.
The radical divergence in the cost of generic drugs, which exist in something resembling a free market, and the cost brand name drugs, which are in government-created monopolies through the patent system is telling.
There is basically no way to justify these increases of 8.3 percent a year for common brandname drugs. It is way above medical inflation, and, as we can see from the prices of generics, there hasn’t been some huge spike in the basic cost of drug manufacturing, such as for equipment, labor, or raw materials. Nor are the brandname drug companies struggling, forcing them to raise prices to stay in business, because they are by far the most profitable part of the health care sector.
When a company is given a government-protected monopoly, with no price controls and Congress even making it illegal for the government to use its large purchasing power to directly negotiate for lower prices, that the company can get away with charging whatever they want. It is an amazing racket if you can get in on it. It is why we pay so much more than people in other countries for brand name drugs–their governments use their purchasing power to directly negotiates for lower drug prices.
It is no wonder the drug companies were so willing to spend $150 million on pro-health care reform ads in exchange for President Obama promising to fully protect this monopoly-with-zero-price-control racket, and expand it for biologics.
Among this is a reminder that we don’t really have a deficit problem, we have a political-corporate corruption crisis that just happens to result in unnecessarily greater spending."
Brand Name Drug Prices Soar
Mon, Mar 14, 2011
by Jon Walker
"Over the passed few years, the price of common brand name prescription drugs have experienced an incredible level of inflation significantly higher than both regular inflation and even medical inflation, according to the Government Accountability Office. Yet, at the same time, the cost of common generic drugs has fallen. Here we have another great reminder that corporations inherently want monopolies and not free markets. From the GAO report (PDF):
We found that the U&C price index for our first basket of 100 commonly used prescription drugs increased at an average annual rate of 6.6 percent from 2006 through the first quarter of 2010 compared with a 3.8 percent average annual increase in the medical CPI. The increase in the price index from the first quarter of 2009 through the first quarter of 2010—prior to passage of health reform in March 2010—was 5.9 percent, less than the increase for the 2 years prior but higher than in 2006. We also found that the U&C price index for our second basket of 55 brand-name drugs increased at an average annual rate of 8.3 percent during our time period. In contrast, the U&C price index for our third basket of 45 generic drugs decreased at an average annual rate of 2.6 percent. Finally, when shifts in consumer utilization between brand-name and generic versions of the same drug were included in the analysis using our fourth basket of drugs selected by active ingredient, the U&C price index increased about 2.6 percent per year, a much lower rate than the 6.6 percent annual increase observed when shifts in utilization were not included.
The radical divergence in the cost of generic drugs, which exist in something resembling a free market, and the cost brand name drugs, which are in government-created monopolies through the patent system is telling.
There is basically no way to justify these increases of 8.3 percent a year for common brandname drugs. It is way above medical inflation, and, as we can see from the prices of generics, there hasn’t been some huge spike in the basic cost of drug manufacturing, such as for equipment, labor, or raw materials. Nor are the brandname drug companies struggling, forcing them to raise prices to stay in business, because they are by far the most profitable part of the health care sector.
When a company is given a government-protected monopoly, with no price controls and Congress even making it illegal for the government to use its large purchasing power to directly negotiate for lower prices, that the company can get away with charging whatever they want. It is an amazing racket if you can get in on it. It is why we pay so much more than people in other countries for brand name drugs–their governments use their purchasing power to directly negotiates for lower drug prices.
It is no wonder the drug companies were so willing to spend $150 million on pro-health care reform ads in exchange for President Obama promising to fully protect this monopoly-with-zero-price-control racket, and expand it for biologics.
Among this is a reminder that we don’t really have a deficit problem, we have a political-corporate corruption crisis that just happens to result in unnecessarily greater spending."